26 January 2014

Zimbabwe: Turning Around the Economy Is Everyone's Business

Zimbabwe needs a turnaround strategy. As for now, all hope is on Zimbabwe Agenda for Sustainable Socio-Economic Transformation (Zim Asset), which was "crafted to achieve sustainable development and social equity anchored on indigenisation, empowerment and employment creation which will be largely propelled by the judicious exploitation of the country's abundant human and natural resources."

[Foreword to the policy document]. People can only wish this won't fall through for lack of funding or be shelved just like previous high-sounding policy documents, which have been gathering dust in government departments.

For this policy to come to fruition, there is need for buy-in from everyone and for serious funding to kick-start industry. The question is where do we turn to for funding to make Zim Asset a dream come true when we do not have industry to talk about and are frustrating efforts of potential investors like Essar Holdings?

Late last year there were reports that government was asking the United Nations to give resources to Treasury with a view to channel the funds towards resuscitation of industry and job creation. Fair and good, but NGOs get funding for specific projects and to redirect humanitarian aid would be to divert resources and that would not augur well with the donor community.

It would seem to me the people of Zimbabwe are keen to be rescued by a government that is also looking up to them for funds. The document mentions tax and non-tax as a source of revenue to boost Treasury coffers. The taxing regime in this country is punishing. For salaried individuals the tax-free threshold is US$250 according to Zimra.

Zimra says; "The official tax table operates on an escalating scale basis, (i.e. the higher your earnings, the greater percentage tax you pay on each bracket of earnings). When your earnings reach a certain amount, the percentage stops increasing and a flat rate of tax becomes applicable for any earnings above this level -- that is Marginal Tax Rate (MTR).

[Zimra website] Government tries to boost revenue by levying its shrinking workforce and asking for high licence fees from business. Lately, 70 diamond cutting and polishing companies left the country citing a hostile operating environment that included high licensing fees amounting to US$100 000 renewable every year among other restrictive measures. This is a tragedy for a country whose policy mentions value addition and beneficiation as one of the strategic clusters for Zim Asset to come to fruition.

Colleges and universities are churning out graduates onto the market every year, but the job market is saturated. The sad thing is people are waiting for government to create the jobs for them, the same government that presided over the collapse of parastatals, which were prime employers in the 80s.

Forceful takeovers of farms in 2000 was regarded as the panacea to our problems, but most of those farms have since been abandoned and now lie fallow. We are actually worse off in terms of agricultural production, than we were before the land reform programme. Agriculture could truly be the backbone of Zim Asset, which is premised on "leveraging own resources" if we had the right mindset, if we treated it as an enterprise, not as a hobby.

It is true, the Robert Mugabe administration messed up agriculture, industry, indigenisation policy, health, education and almost everything and for that reason we should not wait upon them because they are also not sure how to navigate the challenges ahead.

Let each one of us want to leave a positive footprint wherever we are working. It takes two for a bribe to exchange hands. It takes a handful of people to bleed a concern. It will take all farmers for us to reclaim the breadbasket status.

Let's not try to depend on a government that is holding on to a policy with grand ideas, but without funding to turn Zim Asset into a success story.

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